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"institution building" is a perfectly valid phrase in written English.
It typically refers to the process of forming and organizing political, economic, or social institutions. For example, "The government is currently focusing on institution building as a means of improving the country's infrastructure."
Exact(38)
He continued to run and expand his institute, and he was central in postwar institution building for physics.
They stress the need for institution building.
That is part of the longer-term institution building.
Institution building was a matter of personal relations.
As you say, "second generation" reforms, institution building and judicial reform are lacking.
And whether the next government can or wants to really foster institution building.
Similar(22)
Government institution-building increases volunteering".
But this focus on institution-building is misplaced.
Instead, institution-building took the form of tinkering.
"What I've done was institution-building," Mr. Rivel said.
Without sustained investments in human capital and institution-building, growth is condemned to peter out.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com